On appeal from the Superior Court of New Jersey, Law Division, Sussex County.

Matthews, Ard and Polow. The opinion of the court was delivered by Polow, J.A.D.

Polow

[173 NJSuper Page 460] The State of New Jersey appeals from an adverse judgment awarding damages to plaintiffs for losses occasioned by a delay of approximately 56 days between entry of a judgment and docketing thereof by the office of the Clerk of the Superior

On February 17, 1976 plaintiffs had been awarded judgment of $9,000 plus costs against defendants Oleski Construction, Inc. and Wayne Oleski, individually (Oleski). The formal documentation thereof, entitled "Order for Judgment," was signed by the judge on February 24, 1976, received in the office of the Clerk of the Superior Court on February 26, 1976, but not docketed until April 21, 1976. According to the testimony of the Clerk of the Superior Court, the delay in docketing resulted from the existence of a large case backlog due to lack of adequate staffing.

On February 25, 1976 Oleski conveyed certain real estate to defendants Petraitis, subject to a purchase money mortgage for funds advanced by defendant Berkeley Federal Savings and Loan Association. Out of the proceeds of the real estate sale Oleski received $10,850 in cash. Although recording of the deed and mortgage was delayed until March 5, 1976, there is no evidence that as of that date either purchaser or mortgagee had any knowledge of the existence of plaintiffs' judgment against Oleski nor had the judgment been properly docketed. Hence, purchasers and mortgagee were recognized as bona fide purchasers for value by the trial court and their title was held to be free and clear of plaintiffs' judgment lien pursuant to N.J.S.A. 46:22-1. That determination by the trial judge is not challenged on appeal.

Since plaintiffs, as judgment creditors against Oleski, have been successful in satisfying their judgment only to the extent of $3,500, they suffered a loss of the balance thereof in the sum of $5,621.85 which presumably would have been satisfied out of the cash payment made to Oleski at the closing had the judgment been docketed to provide constructive notice prior to the closing. In this regard, it should be noted that the closing took place eight days after judgment had been rendered, one day

after the entry of a formal, written "order for judgment" but one day before that judgment was received for docketing in the office of the Clerk of the Superior Court. The purchaser and mortgagee then did not record the deed and mortgage until March 5, 1976, more than a week after the judgment against the grantor had been received for docketing.

If the judgment had been docketed within a short time after receipt in the Clerk's office, even though the balance as shown on the closing statement would already have been disbursed to the grantors, plaintiffs could nevertheless have claimed a prior lien against the title to the real estate based upon prior record notice and the claim against the purchaser, and the mortgagee would have required resolution of the priority of lien claims. N.J.S.A. 46:21-1; but see Gutermuth v. Ropiecki , 159 N.J. Super. 139 (Ch.Div.1977). In any event, the priority of liens was not in issue since the judgment had not been docketed until long after the deed and mortgage had been recorded.

Although the Tort Claims Act was not offered as a defense in the trial court, plaintiffs' objection to consideration thereof on appeal is without substance. They suggest an injustice would result should the Tort Claims Act be found to bar their recovery, since after the decision below, on the State's application, plaintiffs consented to assign their rights against Oleski to the State. Obviously, should the judgment against the State fall for any reason, the assignment will become inoperative.

Nor would the principle of estoppel by conduct, Scanlon v. General Motors Corp. , 65 N.J. 582, 598 (1974), nor equitable estoppel, Dambro v. Union Cty. Park Comm'n , 130 N.J. Super. 450, 457 (Law Div. 1974), require us to limit defenses to those presented at trial. Although the issue was not the subject of argument or concern by the trial judge, it was in fact asserted in the State's answer within the second and ninth separate defenses. Failure of either side to have argued the effect of the Tort ...

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